TXU's Oncor obtains $1 billion credit facility

New York, Oct. 30 - Oncor Electric Delivery Co., a wholly owned TXU subsidiary, obtained a commitment for $1 billion 364-day senior secured credit facility.

Security for the loan is Oncor's first mortgage bonds.

Of the proceeds, somewhat over $700 million will be used to repay maturing debt through 2003 with the remainder available for general corporate purposes, the company said in its earnings conference call Wednesday.

Interest on the loan is set at the market yield on its 6 3/8% first mortgage bonds due 2012 swapped to a spread over Libor with a floor of Libor plus 300 basis points.

At the moment, the rate on the bonds swapped to Libor is less than the floor so the company would pay Libor plus 300 basis points, TXU said.

TXU also paid a 150 basis points upfront underwriting fee and will pay a further 100 basis points on closing, with the latter figure subject to flex depending on market conditions.

There is also "some protection" for the banks on draws on the facility, TXU said. This is triggered if the yield to maturity on the 6 3/8% first mortgage bonds reaches 10½% or a spread of 550 basis points. Currently the spread is 240 basis points and it recently peaked at around 400 basis points, the Dallas energy company said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.